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Author:
Dave Ramsey

Debt Consolidation is nothing more than a "con" because you think you've done something about the debt problem. The debt is still there, as are the habits that caused it - you just moved it! You can't borrow your way out of debt. You can't get out of a hole by digging out the bottom.

Larry Burkett, noted financial author, says debt is not the problem; it is the symptom. I feel debt is the symptom of overspending and undersaving. Our certified counselors will not recommend debt consolidation for a client. he reason that we do not use debt consolidation is because it doesn't work.

The Truth About Debt Consolidation
A friend of mine works for a debt consolidation firm whose internal statistics estimate that 78 percent of the time, after someone consolidates his credit card debt, the debt grows back. Why? He still doesn't have a game plan to either pay cash or not buy at all. He also hasn't saved for "unexpected events" which will also become debt.

Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case we review, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, BUT you pay the lender more, which is why they are in the business of debt consolidation.

The Real Way to Get Out of Debt
The way you get out of debt is by changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it from someone like Dave Ramsey. Don't try debt consolidation!

This content is provided by DaveRamsey.com and may be used only in its entirety with all links included. Dave Ramsey is changing the face of America by helping people beat debt and build wealth with his bestselling book, The Total Money Makeover, and nationally syndicated radio show, The Dave Ramsey Show. Read more of what Dave says about debt consolidation.

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A Quick Note From The Publisher... If you like the article above, you may be interested in the following article which is also related to Debt Consolidation... 4 Benefits of Debt Consolidation Debt consolidation is the process of combining all your monthly debt payments into one manageable monthly payment. There are at least four benefits well worth consideration when trying to decide the best way to get out of debt. For any debt plan to work, you first have to fully commit to avoid taking on any extra debt while you are trying to dig your way out of the current situation. If you’re ready to make that commitment and stick to it, then you’re ready to be free of your bad debts. Read on… In debt consolidation, you pick a specific day of each month that you would like to make your payment. Part of the stress of carrying debt is remembering to pay everyone on time. When that doesn’t happen, you incur late charges, over the limit charges, and your once low interest rate may skyrocket because you are now perceived as a higher risk. With a debt consolidation plan, you make only one debt payment per month, which is usually set up as an automatic draft from your bank account. Debt consolidation also brings welcome stress relief because you condense multiple debt payments into one manageable monthly payment. Now you don’t have to remember multiple payments. As long as you make your one debt payment per month for the life of the plan, all is well. Debt consolidation also lowers your overall debt payment . People who enter into debt consolidation plans usually have several high interest debts they are trying to overcome. Depending on the method of consolidation (professional help, consolidation loan, refinance, etc.) the repayment terms of your loan are set for a fixed period and the interest rate is considerably lower. Perhaps the best benefit of debt consolidation is lowered interest . Whether you secure a debt consolidation loan, complete a cash-out...